The European unemployment rate climbed in May as companies in Austria, Italy, and Spain increased layoffs. An ongoing economic slump caused the unemployment rate to climb to the highest level since the inception of the euro.

The unemployment rate in May climbed to 11.1 percent from 11.0 percent in April, Eurostat reported. Across the seventeen nations that share the euro, the jobless rate rose to its highest level since data was first compiled in 1995.

As the European debt crisis continues, companies are cutting costs to boost bottom lines. On Sunday, newly released Chinese data confirmed that European trade is slowing. The slowdown in Europe's exports, combined with the fiscal crisis, has forced consumers to cut back. Companies such as Deutsche Lufthansa (OTC: DLAKY) and Peugeot (OTC: PEUGY) increased layoffs to cope with these macroeconomic pressures.

In May, Spain's unemployment rate continued to climb, increasing to 24.6 percent from 24.3 percent in April. Also, Eurostat reported that 52.1 percent of Spain's youth were unemployed in May, a staggering number that is only matched in the eurozone by Greece's youth unemployment rate. Across the seventeen nations that share the euro, 22.5 percent of all youth were unemployed in May. Greece's unemployment rate also climbed to 21.9 percent in May.

Increasing unemployment in peripheral nations might indicate that the European Debt Crisis and ongoing recession are hurting job creation. Job creation in peripheral nations such as Greece and Spain, where harsh austerity measures have been implemented to curb deficit spending, has stagnated as unemployment climbs. Without an increased policy focus on growth, European leaders could see further unemployment upticks, hampering additional efforts to curb budgets.

European stocks, as measured by the iShares EMU Index ETF (NYSE: EZU), fell approximately 0.11 percent for the day. Traders who believe that economic conditions will worsen in Europe could consider shorting this ETF to implement a negative economic thesis across all seventeen euro nations.